Professional Documents
Culture Documents
Submitted by
Prateek Oberai
Roll no. 1302002739
Of
MBA
IN
[Finance]
January 2015
Page 1
Bonafide Certificate
BONAFIDE CERTIFICATE
SIGNATURE
SIGNATURE
FACULTY IN CHARGE
Page 2
ACKNOWLEDGEMENT
guide
distinguished
personalities
for
their
precious
Page 3
PREFACE
Page 4
CONTENTS
Serial No.
Headings
Page No.
1.
Introduction
2.
65
3.
66
4.
Cash Flow
69
5.
Balance Sheet
70
6.
Ratio Analysis
74
7.
Earning Quality
85
8.
Summary of Ratios
90
9.
Conclusion
94
10.
Suggestion
96
11.
References
98
Page 5
LIST OF TABLES
Serial No.
List of Tables
Page No.
1.
Table:
1.1
74
2.
Table:
1.2
76
3.
Table:
1.3
78
4.
Table:
1.4
79
5.
Table:
1.5
80
6.
Table:
2.1
81
7.
Table:
2.2
83
8.
Table:
3.1
85
9.
Table:
3.2
87
10.
Table:
3.3
88
11.
Table:
3.4
89
Page 6
LIST OF FIGURES
Serial No.
List of Figures
Page No.
1.
Figure: 1.1
74
2.
Figure: 1.2
76
3.
Figure: 1.3
78
4.
Figure: 1.4
79
5.
Figure: 1.5
80
6.
Figure: 2.1
81
7.
Figure: 2.2
83
8.
Figure: 3.1
85
9.
Figure: 3.2
87
10.
Figure: 3.3
88
11.
Figure: 3.4
89
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INTRODUCTION
INTRODUCTION
The US$ 28 billion Indian financial sector has grown at around 15 per
cent and has displayed stability for the last several years, even when other
markets in the Asian region were facing a crisis. This stability was
ensured through the resilience that has been built into the system over
time. The financial sector has kept pace with the growing needs of
corporate and other borrowers. Banks, capital market participants and
insurers have developed a wide range of products and services to suit
varied customer requirements. The Reserve Bank of India (RBI) has
successfully introduced a regime where interest rates are more in line
with market forces.
Financial institutions have combated the reduction in interest rates and
pressure on their margins by constantly innovating and targeting
attractive consumer segments. Banks and trade financiers have also
played an important role in promoting foreign trade of the country.
Capital Market
Page 8
The Indian capital markets have witnessed a transformation over the last
decade. India is now placed among the mature markets of the world. Key
progressive initiatives in recent years include:
The depository and share dematerialisation systems that have enhanced
the efficiency of the transaction cycle
Replacing the flexible, but often exploited, forward trading mechanism
with rolling settlement, to bring about transparency
The infotech-driven National Stock Exchange (NSE) with a national
presence (for the benefit of investors across locations) and other
initiatives to enhance the quality of financial disclosures.
Corporatization of stock exchanges.
The Money and Exchange Board of India (SEBI) has effectively been
functioning as an independent regulator with statutory powers.
Indian capital markets have rewarded Foreign Institutional Investors
(FIIs) with attractive valuations and increasing returns.
The Mumbai Stock Exchange continues to be the premier exchange in
the country with an increase in market capitalisation from US$ 40 billion
in 1990-1991 to US$ 203 billion in 1999-2000. The stock exchange has
about 6,000 listed companies and an average daily volume of about a
billion dollars
Many new instruments have been introduced in the markets, including
index futures, index options, derivatives and options and futures in select
stocks.
Page 9
Page 10
Three segments of the NSE trading platform were established one after
another. The Wholesale Debt Market (WDM) commenced operations in
June 1994 and the Capital Market (CM) segment was opened at the end
of 1994. Finally, the Futures and Options segment began operating in
2000. Today the NSE takes the 14th position in the top 40 futures
exchanges in the world.
In 1996, the National Stock Exchange of India launched S&P CNX Nifty
and CNX Junior Indices that make up 100 most liquid stocks in India.
CNX Nifty is a diversified index of 50 stocks from 25 different economy
sectors. The Indices are owned and managed by India Index Services and
Products Ltd (IISL) that has a consulting and licensing agreement with
Standard & Poors.
In 1998, the National Stock Exchange of India launched its web-site and
was the first exchange in India that started trading stock on the Internet in
2000. The NSE has also proved its leadership in the Indian financial
market by gaining many awards such as Best IT Usage Award by
Computer Society in India (in 1996 and 1997) and CHIP Web Award by
CHIP magazine (1999).
The National Stock Exchange of India was promoted by leading Financial
institutions at the behest of the Government of India, and was
incorporated in November 1992 as a tax-paying company. In April 1993,
it was recognized as a stock exchange under the Money Contracts
(Regulation) Act, 1956. NSE commenced operations in the Wholesale
Debt Market (WDM) segment in June 1994. The Capital Market
(Equities) segment of the NSE commenced operations in November
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Page 13
Generally the bigger companies are listed with the NSE and the BSE, but
there is the OTCEI or the Over the Counter Exchange of India, which
lists the medium and small sized companies. There is the SEBI or the
Money and Exchange Board of India which supervises the functioning of
the stock markets in India.
Thus, the growing financial capital markets of India being encouraged by
domestic and foreign investments is becoming a profitable business more
with each day. If all the economic parameters are unchanged Indian
Equity Market will be conducive for the growth of private equities and
this will lead to an overall improvement in the Indian economy.
Indian Stock Market including both NSE-National Stock Exchange and
the BSE-Bombay Stock Exchange have certainly taken a tremendous
beating in the past few weeks. We are sure most of us here knew that the
correction in the trading curve was round the corner which would be
healthy, and the markets would bounce back with the help of mutual fund
investments & buying of Indian stocks again. However the anticipation
went wrong, and the US recession story along with global and Indian
commodity prices have added fuel to the global equity market turmoil on
a whole.
1.5 Future of the industry
The stock market is booming in spite of the low agriculture output. The
monsoon is good in an overall sense but still the question remains who
takes the credit? The answer is the karma of the people. I appreciate the
Indian politicians and the industrialists who being pawns of destiny are
doing things positive and productive. India, as a country is running a very
Page 15
good period and the position of planets in the transit are giving wonderful
results.
Less than one percent of population own stocks and less than 1000
individuals control the market, the majority being the FIIs, the promoters
of the company. The credit should go to media for making stock market
headlines.
In any case if you are long terms players then step-in and buy now and
forget for another 10 years. You will make a killing in the Indian markets.
Most of the tech companies and the main index will do well but slightly
in the lower side of expectations.
2.
3.
4.
5.
2.
3.
4.
5.
6.
1.6.3 Rematerialisation
Sometimes the investor may like to convert his electronic holdings back
into physical share certificate. The process undertaken for this purpose is
called rematerialisation. The investor has to make a request to the
depository participant for rematerialisation. The depository participant
puts forward the request to NSDL after verifying whether the investor in
having necessary security balances. NSDL in turn will intimate the
registrar who prints the certificate and dispatch the same to the investor.
The certificate has a new range of certificate numbers and new folio
number.
The Process
1.
2.
3.
4.
5.
NSDL adjusts its account and passes on the details to the DP.
6.
Depository
Safekeeping of Money
Safekeeping of Money
Page 21
depository
is
like
bank
where
Money
are
held
in
and
their
Registrars
and
Transfer
Agents,
Clearing
Page 22
certificates can be transferred to the joint ownership and then sent for
Dematerialization.
Right now, as per the Companies Act, there is no nomination facility for
shares (whether in the physical or in the electronic form). The nomination
facility for shares can be availed of only when the relevant provisions in
the Companies Act are amended. NSDL captures the details of the
nominee when the account is opened so as to offer the facility as soon as
the relevant amendments are effected in the Law.
A client can choose to open more than one account with same DP. In
addition to this, he has a choice of opening accounts with more than one
DP. However a
broker can open just one Clearing Member account per card/ stock
exchange for clearing purpose, but he can still open multiple beneficiary
accounts Beneficiary is the personal account wherein brokers can keep
their personal holdings.
A broker has only one Clearing Member-pool-account. One Clearing
Member pool account is opened per card/ stock exchange to settle trades
in the dematerialized form. The Clearing Corporation/ House just deals
with one designated account for pay-in and payout and the broker's
clients know to which account they have to deliver and receive Money
from.
A clearing member cannot hold his personal holdings in his clearing
member account. A broker may deal in the depository system as a
clearing member only through a special account, known as the Clearing
Member account. This account can be used only for clearing purposes
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and not for holding his own Money in it. As this is a transitory account,
the Money held in this account are not eligible for corporate actions.
Therefore, the broker will have to open a separate beneficiary owner
account to hold his investments.
There is no compulsion for the client to open his account with the same
DP as that of his broker. Even if he has an account with another DP, he
can carry out normal business with his broker. There is no loss in
operational efficiency. But it is possible that opening account with his
broker's DP may work out to his advantage, as some DPs may offer
special charge structure if the broker and his clients are dealing through
him.
1.6.7 Trading
Trading in dematerialized Money is quite similar to trading in physical
Money. The major difference is that at the time of settlement, instead of
delivery/ receipt of Money in the physical form, it is done through
account transfer.
An investor cannot trade in dematerialized Money through his DP.
Trading at the stock exchanges can be done only through a registered
trading member (broker) of the stock exchange irrespective of whether
the Money are held in physical or dematerialized form. DPs role will only
be to facilitate settlement of trade in the dematerialized form, by
transferring Money from and to the account of the investor, for selling
and buying respectively.
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1.6.8 Settlement
The settlement of trades in the stock exchanges is undertaken by the
clearing corporation (CC)/ clearing house (CH) of the corresponding
stock exchanges. While the settlement of dematerialized Money is
effected through depository, the funds settlement is effected through the
clearing banks. The clearing members directly with the CC/ CH settle the
physical Money.
Exclusive Demat segment follows rolling settlement (T+5) cycle and the
unified (erstwhile - physical) segment follows account period settlement
cycle. In case of rolling settlement cycle, the account period is reduced to
one day.
Settlement day (SD 1) i.e. pay in and pay out of funds and Money next Wednesday (T+5th working day)
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COMPANY
PROFILE
Page 30
INDUSTRY OVERVIEW
History:
Banking in India has its origin as carry as the Vedic period. It is believed
that the transition from money lending to banking must have occurred
even before Manu, the great Hindu jurist, who has devoted a section of
his work to deposits and advances and laid down rules relating to the
interest. During the mogal period, the indigenous bankers played a very
important role in lending money and financing foreign trade and
commerce. During the days of East India Company, it was to turn of the
agency houses top carry on the banking business. The general bank of
India was the first joint stock bank to be established in the year 1786.The
others which followed were the Bank of Hindustan and the Bengal Bank.
The Bank of Hindustan is reported to have continued till 1906, while the
other two failed in the meantime. In the first half of the 19 th Century the
East India Company established three banks; The Bank of Bengal in
1809, The Bank of Bombay in 1840 and The Bank of Madras in
1843.These three banks also known as presidency banks and were
independent units and functioned well. These three banks were
amalgamated in 1920 and The Imperial Bank of India was established on
the 27th Jan 1921, with the passing of the SBI Act in 1955, the
undertaking of The Imperial Bank of India was taken over by the newly
constituted SBI. The Reserve Bank which is the Central Bank was created
in 1935 by passing of RBI Act 1934, in the wake of swadeshi movement,
a number of banks with Indian Management were established in the
country namely Punjab National Bank Ltd, Bank of India Ltd, PUBJAB
NATIONAL BANK Ltd, Indian Bank Ltd, The Bank of Baroda Ltd, The
Central Bank of India Ltd .On July 19th 1969, 14 Major Banks of the
country were nationalized and in 15th April 1980 six more commercial
Page 31
private sector banks were also taken over by the government. The Indian
Banking industry, which is governed by the Banking Regulation Act of
India 1949, can be broadly classified into two major categories, nonscheduled banks and scheduled banks. Scheduled Banks comprise
commercial banks and the co-operative banks.
The first phase of financial reforms resulted in the nationalization of 14
major banks in 1969 and resulted in a shift from class banking to mass
banking. This in turn resulted in the significant growth in the
geographical coverage of banks. Every bank had to earmark a min
percentage of their loan portfolio to sectors identified as priority sectors
the manufacturing sector also grew during the 1970s in protected
environments and the banking sector was a critical source. The next wave
of reforms saw the nationalization of 6 more commercial banks in 1980
since then the number of scheduled commercial banks increased fourfold and the number of bank branches increased to eight fold.
After the second phase of financial sector reforms and liberalization of
the sector in the early nineties. The PSBs found it extremely difficult to
complete with the new private sector banks and the foreign banks. The
new private sector first made their appearance after the guidelines
permitting them were issued in January 1993.
the very large account holders. Then came the liberalization and with it a
multitude of private banks, a large segment of the urban population now
requires minimal time and space for its banking needs.
Automated teller machines or popularly known as ATM are the three
alphabets that have changed the concept of banking like nothing before.
Instead of tellers handling your own cash, today there are efficient
machines that dont talk but just dispense cash. Under the
Reserve Bank of India Act 1934, banks are classified as scheduled banks
and non-scheduled banks. The scheduled banks are those, which are
entered in the Second Schedule of RBI Act, 1934. Such banks are those,
which have paid- up capital and reserves of an aggregate value of not less
then Rs.5 lacs and which satisfy RBI that their affairs are carried out in
the interest of their depositors. All commercial banks Indian and Foreign,
regional rural banks and state co-operative banks are Scheduled banks.
Non Scheduled banks are those, which have not been included in the
Second Schedule of the RBI Act, 1934.
Page 33
With the growth in the Indian economy expected to be strong for quite
some time especially in its services sector, the demand for banking
services especially retail banking, mortgages and investment services are
expected to be strong. Mergers & Acquisitions., takeovers, are much
more in action in India.
One of the classical economic functions of the banking industry that has
remained virtually unchanged over the centuries is lending. On the one
hand, competition has had considerable adverse impact on the margins,
which lenders have enjoyed, but on the other hand technology has to
some extent reduced the cost of delivery of various products and services.
Page 34
Page 35
i)
ii)
SBI and
Nationalized
Regional
Rural
SUBSIDIARIES
Banks
Banks
network in India and overseas. With an asset base of $126 billion and its
reach, it is a regional banking behemoth. The government nationalized
the bank in1955, with the Reserve bank of India taking a 60% ownership
stake. In recent years the bank has focused on two priorities, 1), reducing
its huge staff through Golden handshakeschemes known as the Voluntary
Retirement Scheme, which saw many of its best and brightest defect to
the private sector, and 2), computerizing its operations.
The State Bank of India traces its roots to the first decade of19th century,
when the Bank of culcutta, later renamed theBank of bengal, was
established on 2 jun 1806. The government amalgamatted Bank of
Bengal and two other Presidency banks, namely, the Bank of Bombay
and the bank of Madras, and named the reorganized banking entity the
Imperial Bank of India. All these Presidency banks were incorporated
ascompanies, and were the result of theroyal charters. The Imperial Bank
of India continued to remain a joint stock company. Until the
establishment of a central bank in India the Imperial Bank and its early
predecessors served as the nation's central bank printing currency.
The State Bank of India Act 1955, enacted by the parliament of India,
authorized the Reserve Bank of India, which is the central Banking
Organisationof India, to acquire a controlling interest in the Imperial
Bank of India, which was renamed the State Bank of India on30th April
1955.
In recent years, the bank has sought to expand its overseas operations by
buying foreign banks. It is the only Indian bank to feature in the top 100
Page 37
world banks in the Fortune Global 500 rating and various other rankings.
According to the Forbes 2000 listing it tops all Indian companies.
Nationalized banks
This group consists of private sector banks that were nationalized. The
Government of India nationalized 14 private banks in 1969 and another 6
in the year 1980. In early 1993, there were 28 nationalized banks i.e., SBI
and its 7 subsidiaries plus 20 nationalized banks. In 1993, the loss making
new bank of India was merged with profit making Punjab National Bank.
Hence, now only 27 nationalized banks exist in India.
Old private
Sector Banks
new private
Sector Banks
Page 39
The Banking sector in recent years has incorporated new products in their
businesses, which are helpful for growth. The banks have started to
provide
fee-based
services
like,
treasury
operations,
managing
These banks play a major role in commercial import and export business,
between parties of two countries. This foreign presence also helps in
bringing in the international standards of operations and ideas. The
Page 41
liberalization policy of 1991 has allowed many foreign banks to enter the
Indian market and establish their business. This has helped large amount
of foreign capital inflow & increase our Foreign exchange reserve.
Page 42
Page 43
Page 44
Banking in India
1
Central Bank
of India, Allahabad
Bank,
Nationalised
Banks
Private Banks
Page 45
Not only many financial institution in the world today can claim the
antiquity and majesty of the State Bank Of India founded nearly two
centuries ago with primarily intent of imparting stability to the money
market, the bank from its inception mobilized funds for supporting both
the public credit of the companies governments in the three presidencies
of British India and the private credit of the European and India
merchants from about 1860s when the Indian economy book a significant
leap forward under the impulse of quickened world communications and
ingenious method of industrial and agricultural production the Bank
became intimately in valued in the financing of practically and mining
activity of the Sub- Continent Although large European and Indian
merchants
and
manufacturers
were
undoubtedly
thee
principal
beneficiaries, the small man never ignored loans as low as Rs.100 were
disbursed in agricultural districts against glad ornaments. Added to these
the bank till the creation of the Reserve Bank in 1935 carried out
numerous Central Banking functions.
Adaptation world and the needs of the hour has been one of the strengths
of the Bank, In the post depression exe. For instance when business
opportunities become extremely restricted, rules laid down in the book of
instructions were relined to ensure that good business did not go post. Yet
seldom did the bank contravenes its value as depart from sound banking
principles to retain as expand its business. An innovative array of office,
unknown to the world then, was devised in the form of branches, sub
branches, treasury pay office, pay office, sub pay office and out students
to exploit the opportunities of an expanding economy. New business
Page 46
strategy was also evaded way back in 1937 to render the best banking
service through prompt and courteous attention to customers.
A highly efficient and experienced management functioning in a well
defined organizational structure did not take long to place the bank an
executed pedestal in the areas of business, profitability, internal discipline
and above all credibility A impeccable financial status consistent
maintenance of the lofty traditions if banking an observation of a high
standard of integrity in its operations helped the bank gain a pre- eminent
status. No wonders the administration for the bank was universal as key
functionaries of India successive finance minister of independent India
Resource Bank of governors and representatives of chamber of
commercial showered economics on it.
Modern day management techniques were also very much evident in the
good old days years before corporate governance had become a puzzled
the banks bound functioned with a high degree of responsibility and
concerns for the shareholders. An unbroken records of profits and a fairly
high rate of profit and fairly high rate of dividend all through ensured
satisfaction, prudential management and asset liability management not
only protected the interests of the Bank but also ensured that the
obligations to customers were not met. The traditions of the past
continued to be upheld even to this day as the State Bank years itself to
meet the emerging challenges of the millennium.
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ABOUT LOGO
Togetherness is the theme of this corporate loge of SBI where the world
of banking services meet the ever changing customers needs and
establishes a link that is like a circle, it indicates complete services
towards customers. The logo also denotes a bank that it has prepared to
do anything to go to any lengths, for customers.
The blue pointer represent the philosophy of the bank that is always
looking for the growth and newer, more challenging, more promising
direction. The key hole indicates safety and security.
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MISSION STATEMENT:
To retain the Banks position as premiere Indian Financial Service Group,
with world class standards and significant global committed to excellence
in customer, shareholder and employee satisfaction and to play a leading
role in expanding and diversifying financial service sectors while
containing emphasis on its development banking rule.
VISION STATEMENT:
Premier Indian Financial Service Group with prospective world-class
Standards of efficiency and professionalism and institutional values.
Retain its position in the country as pioneers in Development banking.
Maximize the shareholders value through high-sustained earnings per
Share.
An institution with cultural mutual care and commitment, satisfying
and
Good work environment and continues learning opportunities.
VALUES:
Excellence in customer service
Profit orientation
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PRODUCTS:
'SBI-Home Loans'
features:
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SERVICES:
DOMESTIC TREASURY
BROKING SERVICES
ATM SERVICES
INTERNET BANKING
E-PAY
E-RAIL
RBIEFT
GIFT CHEQUES
MICR CODES
FOREIGN INWARD REMITTANCES
Page 54
ATM SERVICES
Eligibility:
All Saving Bank and Current Account holders having accounts with
networked branches and are:
18 years of age & above
Account type: Sole or Joint with Either or Survivor / Anyone or
Survivor
NRE account holders are also eligible but NRO account holders are
not.
Benefits:
Charges for usage abroad: Rs. 150+ Service Tax per cash
withdrawal Rs. 15 + Service Tax per enquiry.
Page 56
E-PAY
Bill Payment at Online SBI (e-Pay) will let you to pay your Telephone,
Mobile, Electricity, Insurance and Credit Card bills electronically over
our Online SBI website
E-RAIL
Book your Railways Ticket Online.
Page 57
The facility has been launched wef Ist September 2003 in association
with IRCTC. The scheme facilitates Booking of Railways Ticket
Online.
The salient features of the scheme are as under:
All Internet banking customers can use the facility.
The user can collect the ticket personally at New Delhi reservation
counter .
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For the safety of your valuables we offer our customers safe deposit vault
or locker facilities at a large number of our branches. There is a nominal
annual charge, which depends on the size of the locker and the centre in
which the branch is located.
SALIENT FEATURES
Purpose of Loan
Loans to NRIs & PIOs can be extended for the following purposes.
AGRICULTURE / RURAL
State Bank of India Caters to the needs of agriculturists and landless
agricultural labourers through a network of 6600 rural and semi-urban
branches. here are 972 specialized branches which have been set up in
different parts of the country exclusively for the development of
agriculture through credit deployment. These branches include 427
Agricultural Development Branches (ADBs) and 547 branches with
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CREDIT:
The word credit comes from the Latin word credere, meaning
trust. When sellers transfer his wealth to a buyer who has agreed to pay
later, there is a clear implication of trust that the payment will be made at
the agreed date. The credit period and the amount of credit depend upon
the degree of trust.
RISK :
Risk is defined as uncertain resulting in adverse out come, adverse
in relation to planned objective or expectation. It is very difficult o
find a risk free investment. An important input to risk management is
risk assessment. Many public bodies such as advisory committees
concerned with risk management. There are mainly three types of risk
they are follows
Market risk
Credit Risk
Operational risk
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Market Risk
Financial
Risks
Credit Risk
Operational Risk
MARKET RISK:
Market risk is the risk of adverse deviation of the mark to market value
of the trading portfolio, due to market movement, during the period
required to liquidate the transactions.
OPERTIONAL RISK:
Operational risk is one area of risk that is faced by all organization s.
More complex the organization more exposed it would be operational
risk. This risk arises due to deviation from normal and planned
Page 61
CREDIT RISK:
Credit risk is defined as the potential that a bank borrower or
counterparty will fail to meet its obligations in accordance with agreed
terms, or in other words it is defined as the risk that a firms customer and
the parties to which it has lent money will fail to make promised
payments is known as credit risk
Research Methodology
For the purpose of study secondary data has been used for this
purpose various articles, journals and annual reports of the bank has been
studied. In this project various ratios were studied to find out the financial
position of bank. These ratios are as follows:
Capital
Risk
Debit
Equity Funds
Net Profit
Income)
Total Assets
5. Return on Equity
Net Income
Equity Share Capital
Page 63
Net Profits
Average Total Assets
Debit
Total Assets
Page 64
Mar 14
Mar 13
Income
Operating
income
Expenses
Material
consumed
2,816.93
1,925.79
1,971.70
2,078.90
1,616.75
305.79
236.28
669.21
1,750.60
1,741.63
4,909.00
7,440.42
7,475.63
6,447.32
4,946.69
Manufacturing
expenses
Personnel
expenses
Selling expenses
Administrative
expenses
Expenses
capitalized
Cost of sales
8,031.72
8,305.07
Operating profit
7,380.82
5,552.30
5,407.91
5,706.85
3,793.56
Other recurring
7.26
305.36
330.64
65.58
309.17
Page 66
Mar 14
Mar 13
7,388.08
5,857.66
5,738.55
income
Adjusted PBDIT
5,772.43
4,102.73
Financial
expenses
Depreciation
Other write offs
Adjusted PBT
619.50
678.60
578.35
544.78
5,194.08
3,557.95
Tax charges
1,609.33
1,600.78
1,830.51
1,611.73
984.25
Adjusted PAT
5,110.21
3,890.47
3,740.62
4,092.12
2,995.00
41.17
134.52
17.51
65.61
115.22
-2.17
-0.58
5,149.21
4,024.98
3,757.55
4,157.73
3,110.22
appropriation
8,613.59
6,834.63
6,193.87
5,156.00
3,403.66
Equity dividend
1,612.58
1,337.95
1,224.58
1,227.70
901.17
Nonrecurring
items
Other non cash
adjustments
Reported net
profit
Earnings before
Preference
dividend
Page 67
Dividend tax
Mar 14
Mar 13
202.28
164.04
151.21
149.67
153.10
6,798.73
5,332.63
4,818.07
3,778.63
2,349.39
Retained
earnings
Page 68
Cash Flow
6,760.70
5,345.32
-6,908.92
5,116.97
5,056.10
3,648.04
-2,108.82
6,150.73
4,283.20
1,382.62
-4,783.61
8,907.13 -8,074.57
683.55 20,081.10
Page 69
BALANCE SHEET
Balance Sheet of SBI
Bank
Mar
'11
12
12 mths
mths
12 mths
12 mths 12 mths
Capital
and Liabilities:
Total Share Capital
1,151.
82
Equity Share
1,15
Capital
1.82
Share Application
Money
Preference Share
Capital
899.34
0.29
0.00
0.00
0.00
0.00
0.00
0.00
350.00
350.00
350.00
53,9
Reserves
38.8
2
Revaluation
Reserves
0.00
0.00
0.00
0.00
0.00
55,0
Net Worth
90.9
3
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225,
Deposits
602.
202,016.60
11
109,
Borrowings
554.
28
335,
Total Debt
156.
296,280.17
39
Other Liabilities &
Provisions
15,9
86.3
5
406,
Total Liabilities
233.
67
363,399.72
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Mar '11
12 mths
12 mths
12 mths
Mar '07
12 mths 12 mths
Assets
Cash & Balances
with RBI
Balance with Banks,
Money at Call
Advances
Investments
Gross Block
Accumulated
Depreciation
Net Block
Capital Work In
Progress
Other Assets
Total Assets
20,906.97
13,183.11
216,365.9
0
134,685.9
6
120,892.80
8
18,414.4
5
60
9,107.47
4,363.21
4,744.26
0.00
16,347.47
406,233.6
7
181,205.60
18,706.8
0.00
0.00
0.00
363,399.71
694,948.84
189.66
16,300.2
6
11
18
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47,864.06
22,717.2
3
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Ratio Analysis
Capital Adequacy Ratio:
A measure of a bank's capital. It is expressed as a percentage of a
bank's risk weighted credit exposures.
Table: 1.1
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
11.12
11.56
10.09
11.93
13.21
Figures: 1.1
14
12
13.21
11.12
11.93
11.56
10.09
10
8
6
4
2
0
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
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Debt-Equity Ratio:
A measure of a company's financial leverage calculated by
dividing its total liabilities by stockholders' equity. It indicates what
proportion of equity and debt the company is using to finance its assets.
Table: 1.2
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
69.93
84.22
102.11
186.19
234.24
Figure: 1.2
250
234.24
186.19
200
150
102.11
100
84.22
69.93
50
0
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
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CURRENT RATIO:
Current Ratio may be defined as the relationship between current
assets and current liabilities.
Table: 1.3
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
65.17
79.27
98.16
182.22
238.24
Figure: 1.3
300
238.24
250
200
182.22
150
100
98.16
65.17
79.27
50
0
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
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QUICK RATIO:
Quick ratio also known as Acid test or Liquid Ratio is more
rigorous test of liquidity than the current ratio.
Table: 1.4
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
62.16
72.37
96.14
165.46
213.26
Figure: 1.4
250
213.26
200
165.46
150
96.14
100
62.16
72.37
50
0
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
Usually, a high test ratio is an indication that the firm is liquid and
has the ability to meet its current or liquid liabilities in time and on the
other hand a low quick ratio represent that the firms liquidity position is
not good.
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Table: 1.5
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
15.46
16.45
11.87
17.46
19.25
Figure: 1.5
25
19.25
20
15.46
17.46
16.45
15
11.87
10
0
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
Debtors Turnover indicates the number of times the debtors are turned
over during a year. Generally, the higher the value of debtors turnover the
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more efficient is the management of debtors and more liquid are the
debtors.
Advances to Assets:
A high ratio of Advances to Assets would mean that the chances of Non
Performing Assets formation are also high, which is not a good scenario
for a bank.
Table: 2.1
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
0.60
0.63
0.61
0.62
0.60
Figure: 2.1
0.635
0.63
0.63
0.625
0.62
0.62
0.615
0.61
0.61
0.605
0.6
0.6
0.6
0.595
0.59
0.585
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
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Table: 2.2
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
0.81
0.83
0.83
0.86
0.86
Figure: 2.2
0.87
0.86
0.86
Mar 13
Mar 14
0.86
0.85
0.84
0.83
0.83
Mar 11
Mar 12
0.83
0.82
0.81
0.81
0.8
0.79
0.78
Mar 10
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Earning Quality
Percentage Growth in Net Profits
Table: 3.1
(Per cent)
2011
0.61
2012
0.30
2013
0.35
2014
0.81
Figure: 3.1
As per the analysis it can be seen that the net profit of the bank is
going continuously from the year 2008 onwards. In the year 2007 -08 the
net profit was decreased because of the subprime crises in USA. And again
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it was increased in 2008-09 as RBI did not stopped money flow in the
market.
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Table: 3.2
(Per cent)
2010
0.0031
2011
0.0042
2012
0.0049
2013
0.0053
2014
0.0078
Figure: 3.2
Net profit to total assets is continue increasing from 2006 onwards .It
means the bank is able to utilize its assets.
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Table: 3.3
(Per cent)
2010
7.61
2011
7.86
2012
8.39
2013
8.79
2014
8.06
Figure: 3.3
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Table: 3.4
(Per cent)
2010
0.30
2011
0.32
2012
0.36
2013
0.35
2014
0.32
Figure: 3.4
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Summary of Ratios
Ratios
Mar
Mar
Mar
Mar
Mar
14
13
12
11
10
44.37
34.90
33.60
36.78
33.30
49.25
40.45
39.70
41.97
39.36
44.73
36.10
33.76
37.37
34.59
49.61
41.66
39.85
42.56
40.64
14.00
12.00
11.00
11.00
10.00
64.08
49.80
48.58
51.29
42.19
478.31
463.01
444.94
417.64
270.37
478.31
463.01
444.94
417.64
270.37
281.04
293.74
343.59
354.71
316.45
358.12
356.94
351.04
346.21
199.52
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Mar
Mar
Mar
Mar
Mar
14
13
12
11
10
22.80
16.95
14.13
14.45
13.33
21.06
15.06
12.36
12.99
11.41
15.91
12.17
9.74
10.51
10.81
17.52
13.64
11.45
11.81
12.30
9.27
7.53
7.55
8.80
12.31
9.35
7.79
7.58
8.94
12.79
42.97
44.72
56.72
62.34
82.46
0.01
0.01
0.01
4.10
3.91
4.42
5.27
9.50
19.62
20.35
18.46
15.95
9.52
3.55
4.60
5.14
5.61
4.52
Profitability ratios
Mar
Mar
Mar
Mar
Mar
14
13
12
11
10
1.73
1.94
0.78
0.72
0.61
0.11
0.13
0.13
0.10
0.08
15.86
14.70
5.94
6.42
6.04
35.23
37.31
36.60
33.12
33.89
(cash profit)
31.76
32.33
31.00
29.08
28.84
64.49
61.40
63.23
66.35
64.80
68.01
66.70
68.87
70.51
70.22
39.77
44.79
49.41
52.34
65.12
0.43
0.33
0.25
1.25
1.25
1.34
1.26
1.20
1.20
1.22
Current ratio
Current ratio (inc. st
loans)
Quick ratio
Inventory turnover ratio
Payout ratios
Dividend payout ratio (net
profit)
Dividend payout ratio
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Component ratios
Material cost component (%
earnings)
Selling cost Component
0.94
0.72
1.74
4.43
6.12
0.83
0.80
0.75
0.78
0.80
478.31
463.01
444.94
417.64
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270.37
CONCLUSION
The balance-sheet along with the income statement is an important
tool for investors and many other parties who are interested in it to gain
insight into a company and its operation. The balance sheet is a snapshot
at a single point of time of the companys accounts- covering its assets,
liabilities and shareholders equity. The purpose of the balance sheet is to
give users an idea of the companys financial position along with
displaying what the company owns and owes. It is important that all
investors know how to use, analyze and read balance-sheet. P & L
account tells the net profit and net loss of a company and its
appropriation. In the case of SBI Bank , during fiscal 2008, the bank
continued to grow and diversify its assets base and revenue streams. Bank
maintained its leadership in all main areas such as retail credit, wholesale
business, international operation, insurance, mutual fund, rural banking
etc. Continuous increase in the number of branches, ATM and electronic
channels shows the growth take place in bank. Trend analysis of profit &
loss account and balance sheet shows the % change in items of p & l a/c
and balance sheet i.e. % change in 2006 from 2005 and %change in 2007
from 2006. It shows that all items are increased mostly but increase in
this year is less than as compared to increase in previous year. In p& l a/c,
all items like interest income, non-interest income, interest expenses,
operating expenses, operating profit, profit before tax and after tax is
increased but in mostly cases it is less than from previous year but in
some items like interest income, interest expenses, provision % increase
is more. Some items like tax, depreciation, lease income is decreased.
Similarly in balance sheet all items like advances, cash, liabilities, and
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SUGGESTIONS
Some of the recommendation and suggestion are as follows:
The attention is required on the areas of growth, profitability, service
level and building talent.
To increase the profit of bank, bank should decrease their operating
expenses and increase their income.
To increase its liquidity, bank should keep some more cash in its hand
instead of giving more and more advances.
Introduce quality consciousness and standardization of the work
system and procedures.
Make manager competitive and introduce spirit of market-orientation
and culture of working for customer satisfaction.
There is need to build the knowledge and skill bases among the
employ eosin the context of technology.
Performance measure should not only cover financial aspects i.e.
quantitatively aspects but also the qualitative aspects.
It is high time to focus on work than the work-achieved.
Bank should increase its retail portfolio.
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Bank should manage its all risk such as credit, market and operational
risk properly and should be managed by a person who is highly skilled
and qualified.
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REFERENCES
Reports: Annual Reports of SBI Bank .
Websites:
http://www.seminarprojects.com/Thread-mba-project-topics
http://www.sharetermpapers.com/
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